Employment Insurance Overpayment and Collections (8:XI): Difference between revisions
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If the Commission pays a claimant more than that claimant is entitled to, whether through the claimant’s fault or the Commission’s, the Commission is entitled to recover the overpayment (''EI Act'', s. 43). The Commission may deduct the overpayment from any benefit payable to the claimant, or the Commission’s Collections Branch may contact the claimant to recover the overpayment (s. 47). The Commission must send written notice, stating the existence of the overpayment and why it occurred, as well as explaining the right to appeal within 30 days. | If the Commission pays a claimant more than that claimant is entitled to, whether through the claimant’s fault or the Commission’s, the Commission is entitled to recover the overpayment (''EI Act'', s. 43). The Commission may deduct the overpayment from any benefit payable to the claimant, or the Commission’s Collections Branch may contact the claimant to recover the overpayment (s. 47). The Commission must send written notice, stating the existence of the overpayment and why it occurred, as well as explaining the right to appeal within 30 days. | ||
If the overpayment results from a reconsideration of a decision involving an element of judgment or discretion by the Commission (often as part of a random “audit”), an appeal should be filed. Umpires have ruled that the Commission does not have the right to second-guess its previous determination of such questions (such as just cause, misconduct, and availability) unless there are significant new facts it could not have learned about when the initial decision was made. | If the overpayment results from a reconsideration of a decision involving an element of judgment or discretion by the Commission (often as part of a random “audit”), an appeal should be filed. Umpires have ruled that the Commission does not have the right to second-guess its previous determination of such questions (such as just cause, misconduct, and availability) unless there are significant new facts it could not have learned about when the initial decision was made. | ||
=== 1. Interest Regulation === | === 1. Interest Regulation === | ||
EI claimants are required to pay interest on outstanding overpayments and penalties arising from what the Commission considers fraud or misrepresentation. | EI claimants are required to pay interest on outstanding overpayments and penalties arising from what the Commission considers fraud or misrepresentation. | ||
No interest will be charged on debt that arises from the Commission’s errors in benefit payments. Where the claimant has appealed the decision that establishes the overpayment or penalty, no interest will be charged during the appeal process, and claimants will be reimbursed interest payments made before the appeal if the Referees or Umpire decide that there was no fraud or misrepresentation. | No interest will be charged on debt that arises from the Commission’s errors in benefit payments. Where the claimant has appealed the decision that establishes the overpayment or penalty, no interest will be charged during the appeal process, and claimants will be reimbursed interest payments made before the appeal if the Referees or Umpire decide that there was no fraud or misrepresentation. | ||
== B. Time Limits == | == B. Time Limits == | ||
The statutory limitation on collection of overpayments is six years after declaring the overpayments, excluding the periods during which an appeal is pending. The Commission has three years to discover the debt. Periods of appeal do count in this assessment. If an overpayment is due to fraud, the Commission has six years to discover and six years to recover the amount. However, the Commission is not allowed to impose a penalty more than 36 months after the offence. | The statutory limitation on collection of overpayments is six years after declaring the overpayments, excluding the periods during which an appeal is pending. The Commission has three years to discover the debt. Periods of appeal do count in this assessment. If an overpayment is due to fraud, the Commission has six years to discover and six years to recover the amount. However, the Commission is not allowed to impose a penalty more than 36 months after the offence. | ||
== C. Write-off of Overpayment or Other Amounts Owed == | == C. Write-off of Overpayment or Other Amounts Owed == | ||
Section 56 of the ''EI Regulations'' specifies various circumstances in which a benefit wrongly paid may be written off and not be recollected. The provision in s. 56(1)(f) allows a write-off when, in all circumstances: | Section 56 of the ''EI Regulations'' specifies various circumstances in which a benefit wrongly paid may be written off and not be recollected. The provision in s. 56(1)(f) allows a write-off when, in all circumstances: | ||
* the sum is not collectable; or | * the sum is not collectable; or | ||
* repayment would result in undue hardship to the debtor, or | * repayment would result in undue hardship to the debtor, or | ||
* the administrative costs of collecting the penalty or amount, or the interest accrued on it, would likely equal or exceed the penalty, amount or interest to be collected. | * the administrative costs of collecting the penalty or amount, or the interest accrued on it, would likely equal or exceed the penalty, amount or interest to be collected. | ||
Regulation 56(2) provides for an almost automatic write-off of benefits received more than 12 months before the Commission notifies the debtor of the overpayment and that were resulting from the Commission or employer’s error. | Regulation 56(2) provides for an almost automatic write-off of benefits received more than 12 months before the Commission notifies the debtor of the overpayment and that were resulting from the Commission or employer’s error. | ||
Claimants seeking information about the amount of repayment debt may contact Service Canada. | Claimants seeking information about the amount of repayment debt may contact Service Canada. | ||
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::'''Service Canada Information Line''' | ::'''Service Canada Information Line''' | ||
:: 1-800-206-7218 | :: 1-800-206-7218 | ||
For information about collections and repayment, claimants can contact the CRA: | For information about collections and repayment, claimants can contact the CRA: | ||
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::'''CRA''' | ::'''CRA''' | ||
:: 1-866-864-5823 | :: 1-866-864-5823 | ||
A claimant may not apply for reconsideration of a decision refusing to write-off an overpayment. However, according to the Digest of Benefit Entitlement Principles, the claimant or their representative may ask for an appraisal of the situation when a write-off is not granted, or a further appraisal at a higher level in the case of further complaint (20.8.0). This does not amount to a formal reconsideration and the decision cannot be appealed to the SST. | A claimant may not apply for reconsideration of a decision refusing to write-off an overpayment. However, according to the Digest of Benefit Entitlement Principles, the claimant or their representative may ask for an appraisal of the situation when a write-off is not granted, or a further appraisal at a higher level in the case of further complaint (20.8.0). This does not amount to a formal reconsideration and the decision cannot be appealed to the SST. | ||
== D. Benefit Repayment == | == D. Benefit Repayment == | ||
Under s. 145(1) of the ''EI Act'', a claimant whose income for the taxation year exceeds 1.25 times the maximum yearly insurable earnings is liable for the repayment of the lesser of: | Under s. 145(1) of the ''EI Act'', a claimant whose income for the taxation year exceeds 1.25 times the maximum yearly insurable earnings is liable for the repayment of the lesser of: | ||
* 30% of the total benefits, other than special benefits, paid to the claimant in the taxation year, or | * 30% of the total benefits, other than special benefits, paid to the claimant in the taxation year, or | ||
* 30% of the amount by which the claimant’s income for the taxation year exceeds 1.25 times the maximum yearly insurable earnings. | * 30% of the amount by which the claimant’s income for the taxation year exceeds 1.25 times the maximum yearly insurable earnings. | ||
The benefit repayment scheme is administered and enforced by the Minister of National Revenue (s. 148 of the ''EI Act''). A claimant will estimate on their tax form the amount of benefit repayment payable by them (s. 147). | The benefit repayment scheme is administered and enforced by the Minister of National Revenue (s. 148 of the ''EI Act''). A claimant will estimate on their tax form the amount of benefit repayment payable by them (s. 147). | ||
== E. Refund – Insurable Earnings up to $2,000 == | == E. Refund – Insurable Earnings up to $2,000 == | ||
If a person has insurable earnings of not more than $2,000 in a year, the Minister shall refund to the person the aggregate of all amounts deducted as required from the insurable earnings, whether by one or more employers, on account of the person’s employee’s premiums for that year (''EI Act'', s. 96(4)). | If a person has insurable earnings of not more than $2,000 in a year, the Minister shall refund to the person the aggregate of all amounts deducted as required from the insurable earnings, whether by one or more employers, on account of the person’s employee’s premiums for that year (''EI Act'', s. 96(4)). | ||
Revision as of 19:07, 29 August 2023
| This information applies to British Columbia, Canada. Last reviewed for legal accuracy by the Law Students' Legal Advice Program on August 1, 2023. |
A. Overpayments
If the Commission pays a claimant more than that claimant is entitled to, whether through the claimant’s fault or the Commission’s, the Commission is entitled to recover the overpayment (EI Act, s. 43). The Commission may deduct the overpayment from any benefit payable to the claimant, or the Commission’s Collections Branch may contact the claimant to recover the overpayment (s. 47). The Commission must send written notice, stating the existence of the overpayment and why it occurred, as well as explaining the right to appeal within 30 days.
If the overpayment results from a reconsideration of a decision involving an element of judgment or discretion by the Commission (often as part of a random “audit”), an appeal should be filed. Umpires have ruled that the Commission does not have the right to second-guess its previous determination of such questions (such as just cause, misconduct, and availability) unless there are significant new facts it could not have learned about when the initial decision was made.
1. Interest Regulation
EI claimants are required to pay interest on outstanding overpayments and penalties arising from what the Commission considers fraud or misrepresentation.
No interest will be charged on debt that arises from the Commission’s errors in benefit payments. Where the claimant has appealed the decision that establishes the overpayment or penalty, no interest will be charged during the appeal process, and claimants will be reimbursed interest payments made before the appeal if the Referees or Umpire decide that there was no fraud or misrepresentation.
B. Time Limits
The statutory limitation on collection of overpayments is six years after declaring the overpayments, excluding the periods during which an appeal is pending. The Commission has three years to discover the debt. Periods of appeal do count in this assessment. If an overpayment is due to fraud, the Commission has six years to discover and six years to recover the amount. However, the Commission is not allowed to impose a penalty more than 36 months after the offence.
C. Write-off of Overpayment or Other Amounts Owed
Section 56 of the EI Regulations specifies various circumstances in which a benefit wrongly paid may be written off and not be recollected. The provision in s. 56(1)(f) allows a write-off when, in all circumstances:
- the sum is not collectable; or
- repayment would result in undue hardship to the debtor, or
- the administrative costs of collecting the penalty or amount, or the interest accrued on it, would likely equal or exceed the penalty, amount or interest to be collected.
Regulation 56(2) provides for an almost automatic write-off of benefits received more than 12 months before the Commission notifies the debtor of the overpayment and that were resulting from the Commission or employer’s error.
Claimants seeking information about the amount of repayment debt may contact Service Canada.
- Service Canada Information Line
- 1-800-206-7218
For information about collections and repayment, claimants can contact the CRA:
- CRA
- 1-866-864-5823
A claimant may not apply for reconsideration of a decision refusing to write-off an overpayment. However, according to the Digest of Benefit Entitlement Principles, the claimant or their representative may ask for an appraisal of the situation when a write-off is not granted, or a further appraisal at a higher level in the case of further complaint (20.8.0). This does not amount to a formal reconsideration and the decision cannot be appealed to the SST.
D. Benefit Repayment
Under s. 145(1) of the EI Act, a claimant whose income for the taxation year exceeds 1.25 times the maximum yearly insurable earnings is liable for the repayment of the lesser of:
- 30% of the total benefits, other than special benefits, paid to the claimant in the taxation year, or
- 30% of the amount by which the claimant’s income for the taxation year exceeds 1.25 times the maximum yearly insurable earnings.
The benefit repayment scheme is administered and enforced by the Minister of National Revenue (s. 148 of the EI Act). A claimant will estimate on their tax form the amount of benefit repayment payable by them (s. 147).
E. Refund – Insurable Earnings up to $2,000
If a person has insurable earnings of not more than $2,000 in a year, the Minister shall refund to the person the aggregate of all amounts deducted as required from the insurable earnings, whether by one or more employers, on account of the person’s employee’s premiums for that year (EI Act, s. 96(4)).
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